Abstract This work presents the development and validation of computational fluid dynamics (CFD) model of 500 W gamma-type Stirling engine prototype to highlight the effects posed by phase angle and dead volume variations on engine performance. The model is based on a realistic Local Thermal Non-Equilibrium (LTNE) approach for porous domains in the engine (cooler and regenerator). The simulation results showed an acceptable degree of accuracy of 9% and 5%, respectively when comparing with experimental results in predicting the indicated and cooling powers at different heating temperatures. It is found that the maximum indicated power is achieved at a phase angle of 105° rather than at the common phase angle of 90°. The dead volume (connecting pipe) is observed to pose negative effects on engine indicated power and therefore, an optimum value of pipe diameter exists.